According to the FINRA investigation’s findings, Berthel Fisher did not have adequate written procedures and supervisory systems in place from January 2008 to December 2012 for the following alternative investments:

• Non-traded REITs
• Oil and gas programs
• Managed futures
• Business development companies
• Equipment leasing programs

Allegedly, the firm did not accurately calculate alternative investment concentration levels in some cases and, as a result, did not correctly adhere to suitability standards in those instances. Furthermore, Berthel Fisher staff was not adequately trained on the suitability standards for individual states.

In addition, from April 2009 to April 2012, Berthel Fisher allegedly did not have a “reasonable basis” for certain leveraged and inverse ETF sales, according to FINRA’s findings. FINRA investigators also found that non-traditional ETFs were not adequately researched or reviewed, and that the sales force was not adequately trained before registered representatives were allowed to make customer recommendations. Stock fraud lawyers believe that many customers may have suffered significant losses as a result of the recommendation and sale of these products, which were unsuitable for many investors.

Under FINRA rules, firms have an obligation to fully disclose all the risks of a given investment when making recommendations, and those recommendations must be suitable for the individual investor receiving the recommendation given their age, investment objectives and risk tolerance. Furthermore, securities fraud attorneys say that firms have an obligation to properly supervise brokers’ activities while they are registered with the firm.

If you suffered significant losses in non-traded REITs or inverse and leveraged ETFs sold by Berthel Fisher or Securities Management & Research Inc., you may have a valid securities arbitration claim. To find out more about your legal rights and options, contact a stock fraud lawyer at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or newcases@investorlawyers.net for a no-cost, confidential consultation.

According to securities arbitration lawyers, even ETFs with a long-term gain in index performance can result in significant losses for investors. When markets are volatile, the problem is often exacerbated. As a result, ETFs are unsuitable for many investors.

Reportedly, the Financial Industry Regulatory Authority recently ordered J.P. Turner & Co. to pay restitution to 84 clients regarding the unsuitable recommendation and sale of inverse and leveraged ETFs. J.P. Turner did not admit or deny the charges but agreed to pay $707,559 in restitution to settle the charges. The charges also included allegations of excessive mutual fund switches, failure to provide adequate training regarding ETFs and failure to implement an adequate supervisory system.

FINRA also alleges that J.P. Turner allowed registered representatives to recommend these investments without performing due diligence regarding the suitability of these investments to at least 27 customers. These clients reportedly included investors and retirees with conservative risk tolerances. In addition, J.P. Turner is accused of conducting 2,800 unsuitable mutual fund switches, despite red flags. Allegedly, the switching resulted in more than $500,000 in commissions and sales charges paid by 66 clients.

According to investment fraud lawyers, firms have an obligation to fully disclose all the risks of a given investment when making recommendations. In addition, those recommendations must be suitable for the individual investor receiving the recommendation given their age, investment objectives and risk tolerance. If a firm fails to make suitable recommendations, investors may be able to recover losses through FINRA arbitration.

If you suffered significant losses as a result of the unsuitable recommendation of inverse and leveraged ETFs or excessive mutual fund switching, you may be able to recover your losses through securities arbitration. To find out more about your legal rights and options, contact a securities arbitration lawyer at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or newcases@investorlawyers.net for a no-cost, confidential consultation.